Friday, October 1, 2010

Those who were looking for some sort of unambiguously bullish number from this morning’s ISM manufacturing survey may have been disappointed, but as the chart below shows, economic data relative to expectations have taken on a much more bullish tone since the end of August. There was some evidence of a positive trend in the data when I last posted this chart on September 13th in Chart of the Week: Updated Economic Trend Data. At that time, however, the trend was a weak one, leading me to conclude:

"While there is some evidence that the downtrend in economic data may have been broken, there is at best marginal evidence to support the idea of a bullish uptrend in the data."

Since that time, there has been a notable uptick in the data – at least relative to consensus estimates – in manufacturing, housing/construction and in the consumer sector.

Of course until the increase in economic activity is reflected in the nonfarm payrolls reports next Friday or in subsequent months, any sort of ‘improvement’ is going to look more like treading water than genuine progress.

Also of note: next Friday is the final nonfarm payrolls report before the mid-term elections.

Those who were looking for some sort of unambiguously bullish number from this morning’s ISM manufacturing survey may have been disappointed, but as the chart below shows, economic data relative to expectations have taken on a much more bullish tone since the end of August. There was some evidence of a positive trend in the data when I last posted this chart on September 13th in Chart of the Week: Updated Economic Trend Data. At that time, however, the trend was a weak one, leading me to conclude:

"While there is some evidence that the downtrend in economic data may have been broken, there is at best marginal evidence to support the idea of a bullish uptrend in the data."

Since that time, there has been a notable uptick in the data – at least relative to consensus estimates – in manufacturing, housing/construction and in the consumer sector.

Of course until the increase in economic activity is reflected in the nonfarm payrolls reports next Friday or in subsequent months, any sort of ‘improvement’ is going to look more like treading water than genuine progress.

Also of note: next Friday is the final nonfarm payrolls report before the mid-term elections.

Purpose of this Blog

The intent of this blog is to educate, inform and entertain readers, while also serving as an archived learning laboratory of sorts as I try to sharpen my thinking in areas such as volatility, market sentiment, and technical analysis. I also enjoy charging off on tangents and hope that readers may find some illumination or at least amusement in these forays.

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About Me

Chief Investment Officer at Luby Asset Management LLC in Tiburon, California. Previously worked as a full-time trader/investor and also a business strategy consultant. Education includes a BA from Stanford and an MBA from Carnegie Mellon.
Useless trivia: I once broke the world pogo stick jumping record without knowing it.